“Credit Card Rental Car Insurance vs. Auto Insurance: What You Need to Know”

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Understanding Credit Card Rental Car Insurance

At O1ne Mortgage, we prioritize consumer education on credit and finance. This post aims to provide an objective view to help you make informed decisions. For any mortgage service needs, call us at 213-732-3074.

What Is Credit Card Rental Car Insurance?

Credit card rental car insurance is an alternative to the coverage offered by car rental agencies. Known as collision damage waiver (CDW) or loss damage waiver (LDW) insurance, it activates when you pay for the rental car with your credit card and decline the rental agency’s coverage. This insurance may cover some or all costs related to theft or collision, but it comes with limitations and restrictions.

How Does Credit Card Rental Car Insurance Differ From Your Auto Insurance Policy?

Credit card rental car insurance is typically secondary, meaning you must file a claim with your personal auto insurance first. Your credit card benefit will cover what your personal policy doesn’t, usually just the deductible. If you’re traveling abroad or don’t have a personal auto policy, your card’s coverage may act as primary protection.

What Does Credit Card Rental Car Insurance Cover?

While terms vary by card, credit card rental car insurance generally covers:

• Damage to the rental vehicle from a collision
• Theft of the rental vehicle
• Loss-of-use charges for the rental agency

Coverage is usually valid for about a month in most countries, but there are limits, especially for more expensive vehicles.

What Does Credit Card Rental Car Insurance Not Cover?

Typically, credit card rental car insurance does not cover:

• Personal injuries and property damage you cause
• Medical expenses for you and others in your vehicle
• Loss or theft of personal belongings
• Exotic car brands, motorcycles, mopeds, RVs, and large passenger vans
• Wear and tear or mechanical breakdowns

There may also be limitations based on the accident’s circumstances.

Alternatives to Credit Card Rental Car Insurance

Consider these alternatives for additional protection:

Personal Auto Insurance Policy

If your credit card’s coverage is primary, your personal auto policy can provide secondary coverage. If it’s secondary, it can cover your personal policy’s deductible.

Homeowners or Renters Insurance

These policies can cover personal belongings left in a rental vehicle, which neither your credit card nor personal auto policy covers.

Health Insurance

Health insurance can help cover medical expenses if you or someone in your rental vehicle is injured. However, you will still be subject to your health plan’s deductibles and coverage limits.

Rental Car Agency’s Coverage

While expensive, rental agency coverage can be beneficial, especially if your personal auto policy doesn’t apply in the country you’re visiting. Consider their liability coverage and injury protection at a minimum.

Choose the Right Credit Card for You

Credit card rental car insurance is just one of many valuable benefits. Other perks include rewards, 0% APR promotions, and travel benefits. Use Experian’s card comparison tool to find the best credit card for your needs.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions.

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